Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis. Days Past Due 1 to 30 $90,000 Total 31 to 60 61 to 90 Over 90 Accounts receivable Percent uncollectible $36,000 $570,000 $396,000 $18,000 7% $30,000 10% 1% 2% 5% a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,000 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,000 debit. Complete this question by entering your answers in the tabs below. Req A Req B and C Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. Estimated balance of allowance for uncollectibles
Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis. Days Past Due 1 to 30 $90,000 Total 31 to 60 61 to 90 Over 90 Accounts receivable Percent uncollectible $36,000 $570,000 $396,000 $18,000 7% $30,000 10% 1% 2% 5% a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,000 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,000 debit. Complete this question by entering your answers in the tabs below. Req A Req B and C Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. Estimated balance of allowance for uncollectibles
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 3SEB: UNCOLLECTIBLE ACCOUNTS-PERCENTAGE OF RECEIVABLES Charlies Chevy Sales and Service estimates the...
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